Mastercard Incorporated MA recently announced the updation of its AI-powered Consumer Fraud Risk solution, designed to help banks prevent consumers from real-time payment scams. This move solidifies the company's position as a leader in payment security by offering UK banks enhanced visibility into potentially fraudulent transactions, particularly those linked to Authorised Push Payment (APP) fraud.
This move bodes well for Mastercard as demand for fraud and security solutions has been rising rapidly. This is a time opportune move as APP fraud, where consumers are tricked into authorizing payments to fraudsters, costed UK citizens $607 million in 2023. This innovation arrives ahead of new UK regulations, which, from Oct. 7, 2024, will require banks to reimburse all APP fraud victims, shifting the burden onto financial institutions to prevent scams.
Earlier, the decision to return funds to the suffering party used to be a voluntary decision. Enhanced offerings are expected to retain existing bank clients and attract new ones. Its value-added services and solutions net revenue rose 19% year over year in the second quarter of 2024.
Mastercard has aided 11 UK banks in identifying and preventing scams before the money leaves the account since early 2023. Scrutiny of multiple data points related to a transaction and thereafter providing a risk score to the sender’s bank is the process of identifying a fraudulent transaction. The newly added AI enhancements will enable MA to provide the same score in a matter of seconds, allowing the banks to identify mule accounts.
By expanding Consumer Fraud Risk to global markets, Mastercard not only boosts its technological prowess but also strengthens trust in digital payments, offering a better level of protection to consumers worldwide.
MA Stock’s Price Performance
Shares of Mastercard have gained 23.5% in the past year compared with the industry’s 23.4% growth.
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MA’s Zacks Rank & Key Picks
MA currently carries a Zacks Rank #3 (Hold).
Investors can look at some better-ranked stocks from the broader Business Services space like Fidelity National Information Services, Inc. FIS, Paysign, Inc. PAYS and Remitly Global, Inc. RELY. Fidelity National sports a Zacks Rank #1 (Strong Buy) at present, while Paysign and Remitly Global carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Fidelity National’s current-year earnings indicates a 50.7% year-over-year jump. FIS beat earnings estimates in two of the trailing four quarters and missed twice. The consensus estimate for current-year revenues is pegged at $10.2 billion.
The Zacks Consensus Estimate for Paysign’s current-year bottom line indicates 75% year-over-year growth. The consensus estimate for PAYS’ current-year top line is pegged at $58 million, suggesting 22.6% year-over-year growth.
The Zacks Consensus Estimate for Remitly Global’s current-year earnings indicates a 53.9% year-over-year improvement. RELY beat earnings estimates in two of the trailing four quarters and missed twice, with an average surprise of 8%. The consensus estimate for current-year revenues suggests 31.8% year-over-year growth.
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